The Geography of Equity Listing and Financial Centre Competition in Mainland China and Hong Kong

Abstract

This study examines the changing competitiveness of financial centres in mainland China and Hong Kong based on the geography of equity listing of mainland Chinese firms. Pre-listing firm characteristics are used to explore firms’ motives for listing on a particular exchange and whether these motives have changed over time. The results show that Hong Kong’s prominence as an international financial centre is attracting the largest and, recently, also the best performing mainland Chinese state-owned enterprises to go public. Less differentiation exists between the competitiveness of Shanghai and Shenzhen, although the renewed strategy of the Shenzhen stock exchange to attract smaller firms appears to be successful.

Keywords: financial centre competition, stock listing, Hong Kong, China

JEL Classification: M13, O32, M, G15, L10, R12, R38